Pepsi Strategy to India Essay

1932 Words 8 Pages
Pepsi's Entry into India: A Lesson in Globalization

Case summary:
The case discusses the major strategies adopted by Pepsi Co (Soft drinks & snack food major) to enter the Indian market in the late 1980s. Initially the company found it very hard to sell itself to the Indian government as the Indian economy was highly regulated. So to lure Indian government Pepsi Co made promises of working towards enrichment of the rural economy Punjab by getting involved in the agricultural activities. Pepsi Co also made several promises to make its proposal look very attractive to the Indian government.
The case also highlights the criticism faced by the company. Its failure to keep many of the promises after it started the operations in India,
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The company faces several problems as listed below:

* The Indian government & many political parties and factions were against the entry of Pepsi in Indian market. * The Indian law did not permit the use of a foreign brand name Pepsi. In Pepsi’s initial proposal the government did not accept the clause regarding the import of the cola concentrate. * Many Indian soft-drinks companies and social and political groups strongly voiced their opposition to Pepsi’s entry. * Protestors said that the company would siphon out money from the country in the form of profits, promotional fees, and various other means. Protestors argued that the same money could be used for the development of the country. * Some critics even cited the instance of PepsiCo's involvement in Chile's political turmoil to support their opposition to the proposal. Most of the opponents said that allowing a foreign company into a non-priority sector would go against the existing government's foreign trade policies.

2. Critically analyze the strategy adopted by Pepsi to sell itself to the Indian Government. Do you think the biggest factor responsible for the acceptance of its proposal by the regulatory authorities was its projection of its operations as the solution to many of Punjab’s problems? Why/Why not?

Pepsi had cited the reasons of the unrest in the country & it tried to answer them through its strategy. The company knew that the political

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